Rio Tinto Diamonds announced diamond operations’ revenue slumped 23 percent year on year to US$331 million during the first half of year ended June 30 on 6 August 2015. Net underlying earnings surged 72 percent to US$31 million, as local currencies weakened against the US dollar. Net underlying earnings denoted an operational unit’s contribution to the overall group’s net earnings.
The company attributed the decline in revenue to lower rough diamond prices driven by lower demand from India and China, high rough and polished diamond inventory among diamond manufacturers and retailers, and very low profit margins among diamond polishers and cutters.
Rio Tinto Diamonds outperformed the larger Rio Tinto group during the first six months of the period, which saw consolidated revenue decrease of 26 percent to US$18 billion and underlying earnings drop of 43 percent to US$2.9 billion. Net earnings plummeted 82 percent to US$806 million during the same period.
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